The Suez Canal Situation

Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
Statement of Senator Mike Mansfielr. (:'. Montana)
cr-~7-r
FOR REl..EASE
SAT AUG ll 1956 AM
THE SUEZ SITU~TIQli
A week before the 24 nation Conference on the Suez situation is a good
time to assess and evaluate the Suez Incident on the basis of the known facts .
President Gemal Abdel Nasser's seizure of the Suez Canal has posed a difficult
question to which the whole world must find an answer . There is n2 ~~ but
that President Nasser had the right to nationalize the Canal, There is llQ gues•
tion but that since the seizure, with one exception, normal transit of vessels
through the Canal has been allowed to continue in the same old pattern, which is
in accord with the Constantinople Convention of 1888. The one exception is the
continuation of the 8 year old Egyptian boycott of Israeli ships . There ~ a
question as to the threats used by the Government of Egypt to keep the foreign
technicians on the job in the Canal Zone, and there ~ a question of legality
insofar as taking over the assets of the Suez Canal Company are concerned . The
Suez Canal Company has a lease with the Egyptian Government which expires in 1968
at which time its holdings automatically revert to the Government of Egypt .
President Nasser's reported contention that the receipts from the Suez Canal
tolls will average $100 million a year, and that this $100 million could be used
on a yearly basis, to build the Aswan Dam is incorrect on the f~ce of it . The
fact is that the yearly gross proceeds from the Canal average somewhere in the
vicinity of $100 million while the net proceeds are approximately $30 million a
year. There is, it must be remembered, a constant drain on the toll funds to
dredge the waterway to keep it in operation and , with the building of bigger
tankers, it will have to be further widened and deepened in certain localities.
I believe that Secretary Dulles did the right thing in finally turning
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 2 -
down the Aswan Dam proposal because it would have meant the creating, on a gratis
basis, of a moral commitment to the tune of hundreds of millions of United States
dollars to build this project . This project, if it is ever to be built with
United States contributions, should be on a long term loan low interest rate
basis and in accord with and in line with the objectives of American foreign
policy. The mistakes leading up to the Suez crisis must, in part, at least , be
credited to the United States . I Say this, not so much in criticism but on the
basis of hindsight which, while a convenient peg to hang on to, does not excuse
anyone personally for not recognizing the possibility of a mistake at the time
of the event . We know now that :
(1) vie should not have exerted the pressure we did to get the British
out of the Canal Zone although at the time it was done, I considered it a good
policy.
(2) He should not have made the proposal last January to begin the financ­ing,
on a grant basis , of the Aswan Dam with this country contributing $56 mil­lion
toward the start of this project and the British offering Cl4 million. How­ever,
that is water over the dam.
He are now faced with a reality which calls for cool and considered action
on the part of the 1-lestern Big Three and by all other Nations as well . Neither
the West or Nasser can afford a defeat on the question of the Suez Canal . The
answer to this difficult question does not lie in the use of aggressive tactics
or in war . The answer lies in the use of diplomacy and the development of new
policies and ideas . The emphasis on rearming and the calling up to the colors
of reserves by both Britain and France is understandable in view of their economic
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 3 -
interest and dependence on and in the Middle East, as well as other factors ,
but their emotionalism in this situation is, in its own way, as bad and as
dangerous as tlasser's .
To illustrate the importance of the Suez Canal and the questions related
to it , it is well to keep in mind that Western Europe depends for 90% of its
oil needs on the Middle East and that in the next ten years those oil needs
will be doubled . 70% of the world's oil reserves are in the Middle East ; the
loss of Mid-East oil either through closure of the Suez Canal or by nationali­zation
or expropriation of the Middle East wells and pipe lines would bankrupt
Western Europe, bring about its economic collapse and pave the way for Noscow to
move in. l.Je must remember that throufh the t·larshall plan we have s;:ent $15 bil­lion
to rehabilitate Western Europe; we have been responsible for and have to
a large extent spent a great deal of our treasure in keeping NATO functioning ;
we have, through the use of t1utual Security tdministration, Foreign Operations
~dministration, and International Cooperation Administration - all successors
to the l1arshall plan - poured additional billions of dollars into Europe to keep
it a going entity . Surely, we do not want to see what we have contributed to
the welfare of Western Europe, in our own defense and in our own security , go
down the drain because of the situation in the Middle East . We cannot afford it .
President Nasser 's seizure of the Sue~ Canal Company was not a move made
on the spur of the moment . Nor was it made only because of the United States '
refusal to make a grant to Nasser to allow him to start on the Aswan Dam. It
appears to be that Nasser's seizure was a car efully worked out plan which was
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 4 -
moved ahead of ita scheduled timetable and used as a means of offsetting the
United States' refusal to grant funds for the Aswan Dam. In other words , in
my opinion, even if the U. s. funds had been granted , it would have only been
a question of time before the seizure of the Suez Canal Company would have
taken place . We cannot afford to become hysterical or emotional over Nasser's
action because we have to remember that out of his seizure may come events
which might imperil the Middle East oil and pipe lines . Therefore , what we
should do is to go slow, tread water cautiously and plan ~ for the future.
Serious consideration should be given to the following possibilities:
(1) The London Conference called for 'ugust 16th. Secretary Dulles is
to be commended for pouring oil on the troubled waters of the Suez question when
he visited London on August 1 to confer with For eign Minister Pineau of France
and Prime tlinister Eden of Britain. He was able , at that time , to quench some
of the fire which these and other leaders were fanning and to come up with a
proposal for a t wenty- four power conference to convene on Au€ust 16 in London
to consider the question of the Suez. His success in this matter did much to
calm the s i tuation and to allow Messrs . Nasser , Eden, Mollet , and Pineau, as well
as others , to take a s econd look at their hole card~; to reasse$the situation
and to revise their original views. The purpose of the conference beginning Aug.l6,
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
-5-
., . . •. ~
as I understand it, •.o~ill be to try to modernize the Treaty of 1888 and
to meke sure that, if possible, internationalization of the Suez Canal is
made secure . It is to be noted that both India and the U. s .s . R. have
accepted invitations to attend the Conference. Even though they have ex­pressed
reservations it is significant of their interest in this particular
question and an awareness , on their part, of its ramifications and compli­cations.
It is significant to note that this is the first invitation, to
my knowledge, to the U. s .s .R. to participate in a Conference affecting this
particular area and a recognition of the fact that the Soviet Union has
penetrated the l~ddle East. In my opinion, it is there to stay. Incident­ally,
we must recognize that the U. s .s .R. is now an exporting oil nation
entirely on the basis of its own oil production and exclusive of the
Roumanian fields at Ploesti . ~!e should recognize that the cold war has now
developed into an economic struggle between the U.s . s .R. on the one end
and the United States on the other. \~e should not try to outbid or outbuy
the U.s . s .R. l:le should do !2.!lJ.z what is primarily in our own interest .
(2) There is a question in my mind as to whether President Nasser
or Egypt ~ can be absolutely depended upon to keep the Canal open from
here on out . As an illustration, all Israeli ships for the past 8 years,
as 1.sell as other nationalities carrying goods to Israel , have been refused
transit through the Suez Canal.
(3) The Western world, including ourselves, must begin to
lay emergency plans now to export oil, i! nec.essa17, !rom the United States ,
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
-6-
Canada, and Venezuela to \/estern Europe:
(a) We should allow United States oil companies to expand
and develop their oil production in the United States.
(b) We should encourage, through subsidies and otherwise,
the building of seventy thousand to eighty thousand ton tankers . With
their speed, tonnage and reduced comparative costs, they could go around
the Capo of Good Hope and nullify in part, dependence on the Suez Canal.
They could also be used to export oil from the Hestern Hemisphere.
(c) ~/e should give consideration to the possibility of the
construction and support of a new Canal from the Mediterranean through
Israel to the port of Aqaba off the Red Sea.
(4) \</e should recognize Egypt's right to nationalize the Suez
Canal, but if no solid international agreement can be worked out, we
should begin work on the alternatives already suggested. Even if an
agreemWnt can be worked out, we must be prepared to have an alternative
very possibly along the lines already suggested ,
(5) The stakes connected with the question of the Suez are of
the greatest importance because they affect the economic welfare and
security of a large part of the rest of the world , Some of the grave
questions raised are:
(a) The Canal itself and all it means to the eco.comic lifeblood
of the world .
(b) Mid-East oil and all its implications and co~plications .
(c) North Africa and its affect on France 1 s future .
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
. .
- 7-
(d) Europe ' s economy and its dependence on the Suez Canal
and Mid-East oil.
(e) The possibility that the l·:id-East situation may, if it
expands, either bring a final breakdown of NATO or at long last, a
final recognition that if it is to survive it must pull itself together,
reassess its condition and recognize its importance as a European defense
alliance and its poeoible significance as an economic unit ,
(f) The question of Isr ael.
(g) The question of Cyprus.
(h) South of the Sahara Africa is and will be affected more
b,y events growing out of the l~d-East crisis,
~Jar is not the answer to the Suez incident , While the exasperation
and emotionalism of France and Britain is understandable, it should be
recognized that gunboat diplomacy in this day and age would only exacer bate
the situation and make it worse , What ve have to do now is to work with
the present, but think and plan for the future .
We should in addition to the Conference to be held in London,
consider the possibilities, in the light of subsequent circumstances, of
referring the Suez question to the International Court of Justice in the
Hague and, if aggressive action is undertaken by ei ther side on an un­warranted
basis, taking the question immediately to the United Nations
Security Council ,
Aggression and force are not the answers , Reason, not passion -­restraint
not fireworks -- must prevail.

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Transcript

Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
Statement of Senator Mike Mansfielr. (:'. Montana)
cr-~7-r
FOR REl..EASE
SAT AUG ll 1956 AM
THE SUEZ SITU~TIQli
A week before the 24 nation Conference on the Suez situation is a good
time to assess and evaluate the Suez Incident on the basis of the known facts .
President Gemal Abdel Nasser's seizure of the Suez Canal has posed a difficult
question to which the whole world must find an answer . There is n2 ~~ but
that President Nasser had the right to nationalize the Canal, There is llQ gues•
tion but that since the seizure, with one exception, normal transit of vessels
through the Canal has been allowed to continue in the same old pattern, which is
in accord with the Constantinople Convention of 1888. The one exception is the
continuation of the 8 year old Egyptian boycott of Israeli ships . There ~ a
question as to the threats used by the Government of Egypt to keep the foreign
technicians on the job in the Canal Zone, and there ~ a question of legality
insofar as taking over the assets of the Suez Canal Company are concerned . The
Suez Canal Company has a lease with the Egyptian Government which expires in 1968
at which time its holdings automatically revert to the Government of Egypt .
President Nasser's reported contention that the receipts from the Suez Canal
tolls will average $100 million a year, and that this $100 million could be used
on a yearly basis, to build the Aswan Dam is incorrect on the f~ce of it . The
fact is that the yearly gross proceeds from the Canal average somewhere in the
vicinity of $100 million while the net proceeds are approximately $30 million a
year. There is, it must be remembered, a constant drain on the toll funds to
dredge the waterway to keep it in operation and , with the building of bigger
tankers, it will have to be further widened and deepened in certain localities.
I believe that Secretary Dulles did the right thing in finally turning
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 2 -
down the Aswan Dam proposal because it would have meant the creating, on a gratis
basis, of a moral commitment to the tune of hundreds of millions of United States
dollars to build this project . This project, if it is ever to be built with
United States contributions, should be on a long term loan low interest rate
basis and in accord with and in line with the objectives of American foreign
policy. The mistakes leading up to the Suez crisis must, in part, at least , be
credited to the United States . I Say this, not so much in criticism but on the
basis of hindsight which, while a convenient peg to hang on to, does not excuse
anyone personally for not recognizing the possibility of a mistake at the time
of the event . We know now that :
(1) vie should not have exerted the pressure we did to get the British
out of the Canal Zone although at the time it was done, I considered it a good
policy.
(2) He should not have made the proposal last January to begin the financ­ing,
on a grant basis , of the Aswan Dam with this country contributing $56 mil­lion
toward the start of this project and the British offering Cl4 million. How­ever,
that is water over the dam.
He are now faced with a reality which calls for cool and considered action
on the part of the 1-lestern Big Three and by all other Nations as well . Neither
the West or Nasser can afford a defeat on the question of the Suez Canal . The
answer to this difficult question does not lie in the use of aggressive tactics
or in war . The answer lies in the use of diplomacy and the development of new
policies and ideas . The emphasis on rearming and the calling up to the colors
of reserves by both Britain and France is understandable in view of their economic
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 3 -
interest and dependence on and in the Middle East, as well as other factors ,
but their emotionalism in this situation is, in its own way, as bad and as
dangerous as tlasser's .
To illustrate the importance of the Suez Canal and the questions related
to it , it is well to keep in mind that Western Europe depends for 90% of its
oil needs on the Middle East and that in the next ten years those oil needs
will be doubled . 70% of the world's oil reserves are in the Middle East ; the
loss of Mid-East oil either through closure of the Suez Canal or by nationali­zation
or expropriation of the Middle East wells and pipe lines would bankrupt
Western Europe, bring about its economic collapse and pave the way for Noscow to
move in. l.Je must remember that throufh the t·larshall plan we have s;:ent $15 bil­lion
to rehabilitate Western Europe; we have been responsible for and have to
a large extent spent a great deal of our treasure in keeping NATO functioning ;
we have, through the use of t1utual Security tdministration, Foreign Operations
~dministration, and International Cooperation Administration - all successors
to the l1arshall plan - poured additional billions of dollars into Europe to keep
it a going entity . Surely, we do not want to see what we have contributed to
the welfare of Western Europe, in our own defense and in our own security , go
down the drain because of the situation in the Middle East . We cannot afford it .
President Nasser 's seizure of the Sue~ Canal Company was not a move made
on the spur of the moment . Nor was it made only because of the United States '
refusal to make a grant to Nasser to allow him to start on the Aswan Dam. It
appears to be that Nasser's seizure was a car efully worked out plan which was
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
- 4 -
moved ahead of ita scheduled timetable and used as a means of offsetting the
United States' refusal to grant funds for the Aswan Dam. In other words , in
my opinion, even if the U. s. funds had been granted , it would have only been
a question of time before the seizure of the Suez Canal Company would have
taken place . We cannot afford to become hysterical or emotional over Nasser's
action because we have to remember that out of his seizure may come events
which might imperil the Middle East oil and pipe lines . Therefore , what we
should do is to go slow, tread water cautiously and plan ~ for the future.
Serious consideration should be given to the following possibilities:
(1) The London Conference called for 'ugust 16th. Secretary Dulles is
to be commended for pouring oil on the troubled waters of the Suez question when
he visited London on August 1 to confer with For eign Minister Pineau of France
and Prime tlinister Eden of Britain. He was able , at that time , to quench some
of the fire which these and other leaders were fanning and to come up with a
proposal for a t wenty- four power conference to convene on Au€ust 16 in London
to consider the question of the Suez. His success in this matter did much to
calm the s i tuation and to allow Messrs . Nasser , Eden, Mollet , and Pineau, as well
as others , to take a s econd look at their hole card~; to reasse$the situation
and to revise their original views. The purpose of the conference beginning Aug.l6,
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
-5-
., . . •. ~
as I understand it, •.o~ill be to try to modernize the Treaty of 1888 and
to meke sure that, if possible, internationalization of the Suez Canal is
made secure . It is to be noted that both India and the U. s .s . R. have
accepted invitations to attend the Conference. Even though they have ex­pressed
reservations it is significant of their interest in this particular
question and an awareness , on their part, of its ramifications and compli­cations.
It is significant to note that this is the first invitation, to
my knowledge, to the U. s .s .R. to participate in a Conference affecting this
particular area and a recognition of the fact that the Soviet Union has
penetrated the l~ddle East. In my opinion, it is there to stay. Incident­ally,
we must recognize that the U. s .s .R. is now an exporting oil nation
entirely on the basis of its own oil production and exclusive of the
Roumanian fields at Ploesti . ~!e should recognize that the cold war has now
developed into an economic struggle between the U.s . s .R. on the one end
and the United States on the other. \~e should not try to outbid or outbuy
the U.s . s .R. l:le should do !2.!lJ.z what is primarily in our own interest .
(2) There is a question in my mind as to whether President Nasser
or Egypt ~ can be absolutely depended upon to keep the Canal open from
here on out . As an illustration, all Israeli ships for the past 8 years,
as 1.sell as other nationalities carrying goods to Israel , have been refused
transit through the Suez Canal.
(3) The Western world, including ourselves, must begin to
lay emergency plans now to export oil, i! nec.essa17, !rom the United States ,
Mike Mansfield Papers, Series 21, Box 38, Folder 34, Mansfield Library, University of Montana
-6-
Canada, and Venezuela to \/estern Europe:
(a) We should allow United States oil companies to expand
and develop their oil production in the United States.
(b) We should encourage, through subsidies and otherwise,
the building of seventy thousand to eighty thousand ton tankers . With
their speed, tonnage and reduced comparative costs, they could go around
the Capo of Good Hope and nullify in part, dependence on the Suez Canal.
They could also be used to export oil from the Hestern Hemisphere.
(c) ~/e should give consideration to the possibility of the
construction and support of a new Canal from the Mediterranean through
Israel to the port of Aqaba off the Red Sea.
(4) \